What is an “entrepreneur”?

You keep using that word. I do not think it means what you think it means.

I try not to be nitpicky about words. Some people are really into language activism — insisting on using or not using particular terms (e.g. greeting a mixed gender group with, “hey you guys”) because they reinforce power structures, legitimize inequalities, or whatever. I tend to think the power structures lead to the terminology, and not vice versa, so it’s more productive to focus on those structures than on the language.

That said, I am a huge proponent of language precision. When an issue becomes hot and buzzwords are involved, we sometimes forget what we’re talking about. Everyone knows what we mean with certain terms, so why waste time defining them? Anyways, a proposed definition is easily contested by others. So instead we just keep using the term, and our analysis gets gradually muddier.

I believe that “entrepreneur” has reached this stage. The word now means so many things that it means little at all.

A recent piece by Ha-Joon Chang made this clear to me. The piece is titled “Poverty, Entrepreneurship, and Development” (hat tip to Jennifer Lentfer for tweeting it out). Chang cites a finding from an OECD study that 30-50 percent of the non-agricultural workforce is self-employed in most developing countries. He proceeds to refer to these individuals as “entrepreneurs”. Another typical example of this usage comes from a recent Gallup poll, which asked youth in 19 Arab League countries about their plans to start their own businesses; the report refers to those who said “yes” as “entrepreneurs”. The high level of self-employment in developing countries is often used to support assertions that people in those countries are “more entrepreneurial” than employees in developed countries.

But is every self-employed person automatically an entrepreneur? The word has many connotations. I conducted a highly scientific poll (of my Facebook/Twitter friends) to ask what “entrepreneur” means. Answers included references to change, startups, trial and error, risk, failure, dreams, finding openings and leverage points. The term often refers as much to an attitude or a personality trait as to any particular activity. If that’s the case, then we should be wary about inferring the attitude/personality from someone’s actions.

Chang’s article actually does a good job of complicating the issue. He describes the failures of microcredit to help these entrepreneurs grow their businesses or move out of poverty. He ends by discussing the importance of collective entrepreneurship (i.e. education systems, legal structures, business associations, professional management, and other social elements that facilitate the development of a business). This emphasizes the structures that prevent or enable someone to transition from self-employed to employing-others. I think this is key, but these structures also determine whether someone would choose to be self-employed or employed-by-others. If there are no jobs, then self-employment may be your only option.

I won’t try to define what “entrepreneur” “should” mean. I tend to think its meaning is the use that we make of it (hat tip to Wittgenstein). What I will say is that I find some uses to be more useful than others.

As an aspiration to promote, entrepreneurship is useful. It’s usually a good thing when people decide to be entrepreneurs, whatever form that takes, so let’s promote it. But as an analytical category, I find it less useful. The term has too many connotations and leads us into muddy thinking when we conflate people pursuing very different activities. We end up assigning certain aspirations and personality traits to people who are simply pursuing their best livelihood option.

Of course, this isn’t the only term to suffer this fate. “Democracy” is similar: we all know it’s a good thing, but we get into trouble when we start setting criteria to measure it and run regressions. On the other hand, some terms start out all aspiration and little substance (ahem, I’m looking at you, “social enterprise”). I guess expecting precise use of language in public discourse would be, well, inconceivable.

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(You know how sometimes when you say or use a word a lot, it starts to sound funny to you? Like those syllables no longer make sense together, even if it’s a very simple word? That happened to me while writing this post. Turns out there’s a term for this effect: semantic satiation. That’s not really relevant to the above post. I just think it’s cool.)

6 thoughts on “What is an “entrepreneur”?

  1. Dave- you’ve raised a question, or rather, a continuous issue in the world of ‘entrepreneurship’ in quite a Derrida(esque) fashion. What is to a word or definition when the very meaning of it entails action. We can dwell on what it is to be an entrepreneur, or what makes you an entrepreneur, without ever pursuing such activity.

    However- I do have a different opinion then yourself about defining entrepreneurship. Although, as you have rightly stated, the word detains many different connotations, many often more applicable to theory rather then practice- I do believe, especially in ID and private sector development- understanding the behaviour, attributes and potential of different types of entrepreneurship, and their ability to lead to a desired outcome (economic growth, gender inclusion, education etc)necessitates an an understanding- therefore a definition- to what this type of behaviour/ activity entails. This is particularly important in developing countries who are only now realizing the importance of a healthy private sector. How else can they design the adequate support frameworks and policies, if they do not have an understanding of who they are targeting? How can non-public actors become more involved?

    You raise an important point however. Increasing entrepreneurship is a doubled-edge sword. The study by Gallop shows that in the Arab world, between 18%-42% of youth wish to become entrepreneurs. Hence does that mean that mean they want to become self-employed? Is self-employment considered as entrepreneurship? No, not necessarily. It is about the creation of opportunities and value. The true entrepreneurs will be those who impact the economy- those who create gazelles firms, innovation, and superior knowledge. A recent study conducted in the USA shows that more people are calling themselves ‘entrepreneurs’ to deal with unemployment (the same Gallop study showed that only 4% of US youth wished to become entrepreneurs). It (and I) question the how this contributes to the economy-and it is the same in the Middle East. Hence the distinction between necessity-driven and opportunity-driven entrepreneurship by GEM.

    To finish of, I also recently posted a question on Linkedin ‘Define Entrepreneurship in 3 words’- it is amazing the differences in response and perception. Between ‘dream, passion, ambition, risk-taker, nut-case’ etc- No two people view entrepreneurial behaviour in the same manner. As a large percentage of respondents where divided between the Middle East and Europe- the distinctions in the choice of words and perecptions is telling to the influence of culture, background and experience.

    To close off this long comment (please excuse me for this!) I look forward to following more of what you write. You will see that my answer to this post is largely due to the fact that I attempted yesterday through my blog to define entrepreneurship in the MENA, and explain why it should be redefined in context to the environment.

  2. Though this analogy is trite, I’ve become resigned to seeing some words in development and in other policy contexts as acquiring a ‘parliamentary’ role. They’re no longer capable of conveying clear or univocal meaning; instead, they form the coordinates for a bevy of conflicting / overlapping perspectives, discussions, etc. that then congeal into different and disparate subcommittees of interest and treatment, each with their own orders of business.

  3. Having worked with many commercial and social entrepreneurs, I believe there are certain attributes that define them – seeing an opportunity / need and pursuing it relentlessly, taking risks along the way that others would not consider, leveraging resources from wherever they can, (and sometimes not being smart / informed / thoughtful enough to realise that what they are trying to do is ridiculously difficult!!). They are definitely different from your standard businessman/woman.

    However, when working in Francophone Africa, I found that anyone who had their own business was referred to as an “entrepreneur”. I assumed it was a translation thing from non native English speakers. Can anyone comment on this?

  4. Very simple: an entrepreneur is someone who conceives an idea, creates an organization around it and contributes economic or social value to the world.

    If you are running a candy store. You didn’t come up with an original idea. You’re just running a candy store.

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